Dive Brief:

• Minnesota regulators on Monday voted 3-2 to approve a 550 MW natural gas plant in Wisconsin after rejecting a last minute petition for environmental review by a Native American environmental group, Honor the Earth.

• The proposed $700 million Nemadji Trail Energy Center (NTEC) will be co-owned by Minnesota Power and Dairyland Power Cooperative, serving customers across northeastern Minnesota and western Wisconsin. In July, an law administrative judge recommended the proposal be rejected, saying Minnesota Power did not adequately prove the purchase was "needed and reasonable." 

• The gas-fired plant has faced opposition from environmental and consumer groups who say it is "unneeded and unreasonable" from both a ratepayer and an environmental perspective, Leigh Currie, a senior staff attorney from the Minnesota Center for Environmental Advocacy (MCEA), told Utility Dive. 

Dive Insight:

Five expert witnesses testified on behalf of Fresh Energy, MCEA, Sierra Club and Wind on the Wires in opposition to the plant earlier this year, highlighting a growing divide between utilities trying to maintain a stabilized grid as more renewable resources are integrated and environmental concerns that the renewables transition isn't happening fast enough.

The four groups, which together made up the Clean Energy Organizations, argued that adding more fossil fuels onto the grid was unnecessary and that the model Minnesota Power used to justify the gas plant was flawed.

The utility's calculations "overstated future load and energy requirements, and by extension, the capacity required for its system," according to testimony from Elizabeth Stanton, director and senior economist of the Applied Economics Clinic, who was one of the groups' representatives. 

Minnesota Power argued the plant was a necessary tool in their broader resource strategy, which aims to generate 44% of power from renewable resources by 2025, Julie Pierce, vice president of strategy and planning at Minnesota Power told Utility Dive. Currently, 30% of the utility's power is generated from renewables. 

"The natural gas portion of our plan will be the flexible, dispatchable energy producer that will help us incorporate more renewables into our portfolio," she said.

The utility generated 98% of its electricity from coal plants as recently as 2005, said Pierce, and has since retired seven out of their nine plants.

However, the clean energy groups said Minnesota Power "still has not established retirement dates for coal power plants remaining in its system," according to a statement from MCEA.

"​We’ve been advocating from the beginning that this should have been a holistic look at Minnesota Power’s system," said MCEA's Currie. "So the commission should have viewed this plant in light of its current system, including its existing coal plants and potential alternatives to the gas plants which it didn't do entirely, and I think the decision today really reinforces that."

Minnesota Power plans to start generating electricity from the plant by 2025, pending environmental permit approval from Wisconsin regulators, a process they hope to begin by the end of this year or beginning of next, according to Pierce. NTEC is projected to increase customer costs by a little over 2% that year, with costs petering out as demand charges decrease. 

The plant will be located in Superior, Wisconsin, just across the border from Minnesota Power headquarters in Duluth, Minnesota, which has made regulatory action more complicated due to the multiple jurisdictions and conflicting interests involved.

The mayor of Superior has supported the plan to build the plant, saying it would be "good economically" for the city, the Duluth News Tribune reported. Meanwhile, Duluth city councilors Em Westerlund and Joel Sipress both wrote opposing testimony to the Minnesota Public Utilities Commission, voicing concern about "environmental degradation" and "potential impact on local ratepayers."

Minnesota public utility commissioners used the plant's planned location to deny Honor the Earth's call for an environmental assessment, saying the commission's regulatory authority "stops at the border."

But "the Commission has the authority to consider the adverse impacts of the NTEC, whether these impacts are in the form of higher energy bills that travel through the mail to Minnesota mailboxes or in the form of pollution that travels through the air to Minnesotans’ bodies and environment," Honor the Earth Staff Attorney Paul Blackburn wrote in a letter to the commission. 

"Minnesota is under no obligation under the U.S. Constitution to force Minnesotans to help Wisconsin pay for a power plant that is not in the public interest of Minnesotans," he said.